SEC accuses two cryptocurrency giants of offering and selling unregistered securities

The US Securities and Exchange Commission (SEC) is suing Genesis, a company owned by DCG, and Gemini, a company owned by the Facebook twins, for offering and selling unregistered cryptocurrency securities.

The research is related to the Gemini Earn program, which has raised billions of dollars from hundreds of thousands of investors.

Basically, such a program offered a return of 8% per year. While maintained by Gemini, the same depended on Genesis to function, but this was found to be insolvent after a looting last November.

In other words, investors lost money. Adding to the vote, the Winklevoss twins are now accusing Barry Silbert of the Digital Currency Group (DCG), Genesis’ parent company, of fraud.

What do seat belts have to do with cryptocurrencies?

In addition to the SEC’s official note, Chairman Gary Gensler also used social media to comment on the Gemini and Genesis case.

Gensler compares cryptocurrencies to the automotive sector, noting that cars can have different functionalities, such as using gasoline or electricity to drive. It does state that drivers and passengers must be protected.

“Likewise, our federal securities laws protect investors”says Gary Gensler, chairman of the SEC. “There is no reason to treat the cryptocurrency market differently from other capital markets just because it uses different technology.”

Subsequently, the SEC chairman notes that some platforms offering cryptocurrency income do not meet the requirements.

“As with seat belts and cars, we need to make sure that investor protection is standard practice in the cryptocurrency market.”

So if the Winklevoss twins and Barry Silbert were already stressed while fighting each other in court, the SEC’s entry should make things even worse.

SEC too late again, US congressman says

Although the US is quicker with its investigations, such as the arrest of the Mango hacker or the extradition of Sam Bankman-Fried, this still does not seem to be enough to protect investors.

US Congressman Tom Emmer also criticized the SEC’s action via Twitter. After all, the agency only came on the scene after Gemini and Genesis crippled hundreds of thousands of investors.

“Gary Gensler is again late to the game and is not ‘protecting’ anyone. It’s pretty clear that his policy strategy of “regulation by enforcement” is hurting ordinary Americans.”

Market Ignores Massive Crisis And Remains High

In addition to Genesis, it is worth noting that the Digital Currency Group is also responsible for the world’s largest Bitcoin fund, Grayscale. Therefore, the market could have serious consequences depending on the outcome of the story between Gemini and Genesis (and now the SEC).

Investors don’t seem to worry about that, though. This Thursday (12) BTC traded above $19,000, its highest level since the FTX bankruptcy, after US inflation showed a slight pullback.

Other cryptocurrencies managed to post even bigger returns, showing optimism that winter is over.

Finally, the moment is still delicate, with bulls and bears having their reasons for moving the market. Therefore, we can expect 2023 to be another eventful year for cryptocurrencies.

Source: Live Coins

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